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2017 (9) TMI 1956 - AT - Income TaxReopening of assessment u/s 147 - reason to belive - information received from the DGIT(Inv), Mumbai - assessee availed the accommodation/fictitious bills from the 13 parties - HELD THAT:- The case of the assessee was reopened u/s 147 of the Act after finding the information from DGIT(Inv), Mumbai dated 13.03.2014 in which it was conveyed that the assessee has availed the accommodation/fictitious bills from the 13 parties. Prima facie there is reason to believe that the income chargeable to tax has escaped assessment. The CIT(A) relied upon the case law title as Raymond Woollen Mills Ltd. [1997 (12) TMI 12 - SUPREME COURT] - this issue was not under consideration at the time of assessment therefore, there is no question of change of opinion. The present case is in connection of availing of accommodation/fictitious bills entries by the assessee which was not on record at the time of the assessment of the assessee. These facts are totally new facts which came into notice before the AO through the letter dated 13.03.2014 received from the DGIT(Inv), Mumbai. Accordingly, we are of the view that the CIT(A) has rightly upheld the reopening of the proceedings u/s 147 of the I.T. Act. - Decided in favour of the revenue. Estimation of income - bogus purchases - addition of the profit element to the extent of 0.25% on the bogus purchase of 13 parties - contention of the assessee is that the addition should not be more than 1% specifically in view of the nature of the business of diamond of the assessee - HELD THAT:- As per CIT-A purchase of cut and polished diamond from the open market was made mainly to save 1% vet levied thereon and in addition the buyer get the benefit of lower rate/ cash discount. In the said circumstances, the CIT(A) was of the view that the addition of extra profit @ 7.3% of purchases was not held to be justified and reduced the profit embedded in the transaction @ of 2% of purchase value record in the books of accounts. No distinguishable material has been placed on record even after service of the notice to assessee to the contradict the finding of the CIT(A) on record. Nothing came into notice that the assessee produced some material earlier which was not considered by the CIT(A). Taking into account all the facts and circumstances we are of the view that the CIT(A) has rightly estimated the profit @ 2% on gross profit of the purchase value - CIT(A) has passed the order judiciously and correctly which is not liable to be interfere with at this appellate stage. Decided in favour of the Revenue.
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